CANADA FX DEBT-C$ holds steady as ECB dismisses speculation
* C$ at C$0.9890 vs US$, or $1.0110 * ECB cools talk about its bond-buying plans * Bond prices mostly lower By Jon Cook TORONTO, Aug 20 (Reuters) - The Canadian dollar was unchanged against its U.S. counterpart on Monday as the European Central Bank cooled speculation the bank was preparing to buy bonds of euro zone countries if their borrowing costs rose over certain limits. "It is absolutely misleading to report on decisions, which have not yet been taken and also on individual views, which have not yet been discussed by the ECB's Governing Council, which will act strictly within its mandate," an ECB spokesman said on Monday. Over the weekend, German magazine Der Spiegel said the ECB is considering setting interest rate thresholds for any purchases of struggling euro zone countries' bonds so that it would buy such bonds if their interest rates exceeded a certain premium over German bonds. The Der Spiegel report had temporarily boosted the euro and other growth-linked currencies such as the Canadian dollar , which firmed overnight Monday to C$0.9876 versus the U.S. dollar, or $1.0125. But gains were reversed after the ECB comments. "The Canadian dollar really hasn't reacted that much to it," said David Bradley, director of foreign exchange trading at Scotiabank. The currency, however, advanced against the euro, hovering near last week's record high against the single currency . "Despite softness in the euro there's still plenty of sellers around in the Canadian dollar," said Bradley. At 8:20 a.m. ET (1220 GMT), Canada's dollar was at C$0.9890 versus the U.S. currency, or $1.0110, unchanged from Friday's close. Bradley said the Canadian dollar would likely remain within a tight range between C$0.9850 and C$0.9910, citing weak summer volumes and a lack of significant data. Minutes from the Federal Reserve's policy-setting meeting will be closely watched this week for further currency direction, while Bank of Canada Governor Mark Carney is expected to speak at an event. Market watchers will look closely for any change in the Canadian central bank's hawkish tone. Canadian bond prices were mostly lower. The two-year bond fell 3 Canadian cents to yield 1.210 percent, and the benchmark 10-year bond slid 23.5 Canadian cents to yield 1.971 percent.
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